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The 42 annual tour of the business outlook panel wound up its final presentation yesterday in Richmond, Indiana.
The panel is an annual activity of Kelly School of Business. A group of economists and financial experts who get together each year on October to understand the latest trends in the economy and predict where the economy is heading in the year ahead. Experts will also go around the state over the span of the couple of weeks to most of Indiana’s major cities and talk with audiences in those places about how they see economy shaping up.
There are different members of the panel that deal with the global, national and local economy, Director of Indiana Business Research Center Jerry Conover said.
“We always look forward to hearing what the business people and community leaders across the state are thinking,” Conover said.
Conover says they expect 2014 will begin with unimpressive growth and continue job growth. As the year progress in 2014 though, we will expect to see a stronger growth toward the year end. To put that in figure, it is estimated that the overall economy measured in GDP will expand at about 2.5 percent rate.The employment will grow nationally by a little more than 2 million jobs. Unemployment by the end of the year should be down to 6.5 percent nationally.
Conover says the main factors to growth are the continued low interest rates making borrowing affordable for business and propping up higher stock market prices as a result.
“Employers have been increasingly optimistic, though there is still a lot of hesitation,” Conover said, “They’re a little bit more willing to invest in new facilities and to hire staff. They’re not nearly yet to the level they were prior to the recession, but we do see progress coming along.”
According to Conover, Indiana mirrors national economy in many respects though the unemployment has continued to be higher than national average. The most recent figure was 8.1 percent for the state, whereas nationally it’s about 1 percentage point lower.
“We expect for the coming year that unemployment will drop in Indiana, probably somewhere in the upper 6 percent range,” Conover said, “Pay roll jobs will grow by about 55,000 more jobs, and that would be stronger growth than we’ve seen this year.”
Meanwhile, manufacturing continues to be a key factor in creating new jobs in Indiana since the recession. Yet, manufacturing employment and wages are not growing nearly as fast as they had been several years ago.
Conover explains that is because firms during the downturns were able to find ways to make their production more efficient, by improving technology, improving processes that didn’t requires many people to do the job. Once those improvements were made, factories are turning out more products and more dollar value of their output even though they don’t have many employees as they used to.
Conover also adds that employment growing substantially more in nonmanufacturing sector. Healthcare services has been one of the big areas. There has been a lot of job growth in various parts of healthcare sector.